"Missed in the oceans of ink written about the Jewish state is a staggering fact: Israel is the world's quintessential start-up nation. Israel leads the world in technology start-ups per capita. More remarkable is that these start-ups have attracted more venture capital investments per capita—2.5 times the US, 30 times Europe, 80 times India, and 350 times China.

Even more surprising is that one of the main sources of all this innovation is the Israeli military, and not in the way that one might think. Commercialization of military technologies is part of the story, but the greater impact is through Israeli culture and its connection to the military.

The military is where many Israelis learn to lead and manage people, improvise, become mission oriented, work in teams, and contribute to their country. They tend to come out of their years of service (three for men, two for women) more mature and directed than their peers in other countries. They learn "the value of five minutes," as one general told us. They even learn something more uniquely Israeli—to speak up regardless of ranks and hierarchy if they think things can be done better.

In Israel, every employer knows what it means to have been a company commander in the infantry or tanks or to have served in certain tech-oriented intelligence units. In the US, many interviewers would not know what to do with someone like Brian Tice, a U.S. Marine Corps captain when he decided that he wanted to make the transition to business.

By that time Tice was thirty, he had completed five deployments—including assignments in Haiti and Afghanistan—and was in the middle of his sixth, in Iraq. He wrote his essays for his applications to Stanford's MBA program on a laptop in a burnt-out Iraqi building near the Al Asad Air Base, in the violent Al Anbar Province of western Iraq. He had to complete his application at odd hours because his missions always took place in the middle of the night.

Tice interviewed with Stanford between sniper operations and raids, and had to cut the interview short when mortars landed nearby.

More and more American military officers are applying for MBA programs and, like Captain Tice, are going to extraordinary lengths to do so. In 2008, of aspiring MBA applicants that took the Graduate Management Admission Test (GMAT), 6 percent had military experience. At the University of Virginia's Darden School of Business, the number of military applicants rose 62 percent from 2007 to 2008. The first-year class in 2008 had 333 students, 40 of whom were from the military, including 38 who had served in Afghanistan or Iraq.

The Graduate Management Admission Council, which administers the GMAT, has made it a priority to better organize the path from war front to business school. It has launched its Operation MBA program, which helps members of the armed forces find B-schools that waive application fees or offer generous financial aid packages and even tuition deferrals for cash-strapped vets. And the council is even setting up GMAT test centers on military bases.

Yet the capacity of U.S. corporate recruiters and executives to make sense of combat experience and its value in the business world is limited. Many simply do not know how to read a military résumé. Al Chase, an executive recruiter who specializes in placing veterans, employers have trouble understand the leadership experience that veterans have, such as high-stakes decision making and management of large numbers of people and equipment in a war zone. The reaction often is, "That's very interesting, but have you ever had a real job?"

Junior commanders in America's new wars—in Afghanistan and Iraq, especially—find themselves playing the role of small-town mayor, economic-reconstruction czar, diplomat, tribal negotiator, manager of millions of dollars' worth of assets, and security chief, depending on the day.

Given all this battlefield entrepreneurial experience, the vets coming out of the Iraq and Afghanistan wars are better prepared than ever for the business world, whether building start-ups or helping lead larger companies through the current turbulent period."

Excerpted from Start-Up Nation, by Dan Senor and Saul Singer. Copyright © 2009 by Dan Senor and Saul Singer. Reprinted by permission of Twelve, a Division of Hachette Book Group. New York, NY. All rights reserved.